ANACONDA MINING
Advanced work in Mineral Resources Written by Mark Golombek The company s gold mining project in Newfoundland has over 6,000 hectares and controls nearly the entire Ming s Bight Peninsula, which is located within the greater Baie Verte Peninsula. For a small company to be so successful in the gold mining sector is quite a feat, and Business in Focus spoke with Dustin Angelo, its President and CEO, to get the full story of the company s success. Anaconda Gold Inc. completed an acquisition of Colorado Minerals Inc. on April 18, 2007, becoming Anaconda Mining Inc. and thus begins the story of the little company that could. Dustin came on board in September of 2010 as President and CEO. At the time, the company had just finished upgrading the front end of its mill by adding a 1,000-tonne per day ball mill and flotation circuits. The strategic investments in equipment helped improve operating efficiency which in turn led to a reduction in costs. It took us a little while to commission the project from September 2010 to May 2011, at which time we became profitable and never looked back, Dustin explains. We layered on a lot of debt from 2008 through to 2010 due to the decision to upgrade our circuit, and then the commission phase took a bit longer, but, by May 2011, we were seeing profits.
It is said that great things come in small packages. So it is with Anaconda Mining Inc., a small mining company that has accomplished some great things. Strength followed strength as proceeds from the Pine Cove ore assets for lump sum cash payments and royalties, shares mine were used to pay down its debts and, by May of 2013, Dustin. We generated $4 million in two guaranteed payments all of its debt was cleaned up other than one government and a milestone payment of $1 million back in September after loan which is non-interest bearing and some vehicle financing which is also non-interest bearing. It currently has less owed another two million within 15 months and we ve the first property went into commercial production. We re been than $250,000 debt remaining and a very clean balance sheet, receiving royalties since October. cbw resource consultants although the most remarkable thing is that Anaconda remains profitable even at current gold prices. Pine Cove has been a All of this money will, of course, be going back into the Pine dependable cash flow generator that will continue producing. Cove operations with more cash to be put toward exploration. Anaconda has consolidated the whole Ming s Bight Peninsula; The company is also receiving revenue and cash from a non having started with only 660 hectares in the original mining core asset sale. In December 2011, we sold our Chilean iron lease, it now controls 6000. Not only has it consolidated the
the remaining forty percent was attained through shares and New Island Resources was bought out. Anaconda remains profitable even at current gold prices. land, but it has also combined the related data, giving the team the ability to find the key features that will lead to the next gold deposit. So, how did this small company get one hundred percent of Pine Cove? It entered into a joint venture in 2007 with New Island Resources. Anaconda controlled the property and made some initial payments garnering thirty percent of the project. When it did the upgrade to the ball mill and flotation circuit in the summer of 2010, a commercial production milestone was attained which enabled it to gain sixty percent of the operation. During the fall and winter leading up to January of 2011 One of the key investment highlights of the Pine Cove operation is that there are no issues with First Nations or unions, and the relationship with the Newfoundland government is stellar. We work hand in glove with [the government] on research projects and funding, says Dustin. There is a sort of triumvirate with us, the College North Atlantic and certain agencies within the government of Newfoundland. We are all working together to do R&D projects and promote job skills enhancement in the mining industry, using our site as a kind of lab for students. Programs are on-site which gives students a chance to work on the mill for practical experience. There are a couple different ongoing projects happening in conjunction with the College of the North Atlantic. One is a research project to determine additional areas in the mill to automate. The College of the North Atlantic assisted on the evaluation stage, and now the company is prioritizing the items and gathering quotes. Anaconda is presently applying for
a major grant with the Atlantic Canada Opportunities Agency fund which could bring in an additional $2 to $3 million to build an automated information tracking and remote management system for the mining operation. It s part and parcel to being the size of company we are. We have to leverage these types of opportunities because we don t have a massive in-house R&D group or huge exploration teams. We have to work with outside agencies to help facilitate success here. It s a mutually beneficial relationship. The company is also receiving funding from IRAP (The National Research Council s Industrial Research Assistance Program) for grind size testing on ore feed to the flotation circuit as well as reagent addition analysis and slimes reduction. It is hoped that the relationship between throughput in the grinding mill and recovery at the flotation circuit can be optimized as a result of information retrieved from this data. Anaconda also has research and development funding for a grade control project in the pit. It is evaluating technologies to identify ore versus waste down the hole before blasting and Pine Cove has been a dependable revenue generator that will continue producing. is looking at blast movement technology to determine if and how far the rock moves from its original position after detonation. To find more resources, the company has secured two of the more highly prospective gold projects in the area. We have a relationship with a company called Silvertip Exploration Consultants and have been working with them since 2012 to explore all the new properties. Our goal is to find enough in gold resources on the peninsula to justify another mill expansion and at least double the size of production. He refers to land packages that are within five to ten kilometres of the current mill. These include Deer Cove and Stog er Tight which are the two most likely prospects. Anaconda has active exploration programs all over its land
The company has secured two of the more highly prospective gold projects in the area. package. Most of the drilling has been down on the fringes of the current pit. The team has also done exploration on Romeo and Juliet a quartz vein that is 1.5 kilometres north of the mill while Stog er Tight and Deer Cove are next in line. Anaconda is organizing data and planning to drill by late spring. There is a lot of optimism and the team is willing to invest the money to advance sites to production stage. Anaconda uses a contract miner, Guy J. Bailey, for all the mining work which will continue as it moves forward with another pit. When it comes to the mill, the staffing aspect would not change dramatically. You don t have to double your mill staff if you re going to double production, says Dustin. So I think generally speaking, we are okay. Being a small company has its human resources challenges, but Anaconda has the resources necessary to get the job done, and its strong relationship with College North Atlantic has helped it develop a pool of potential applicants. As we ve grown we have expanded our training capabilities along with how much time and money we spend on our employees. We are becoming more knowledgeable in that regard and feel we can handle any future HR challenges. Since a lot of its employees are from the peninsula, education initiatives were put forward to help them grow and learn more about other positions in the industry which has been mutually beneficial for both the company and the community. For the last two years, Anaconda has developed a relationship with the community in other ways as well, provided funding for a number of local projects important to the community.
Anaconda s strong relationship with College North Atlantic has helped it develop a pool of potential employees as well as technology to increase productivity. Among other donations, last year it donated a compressor for the regional hockey arena in the Baie Verte Peninsula, and this year it donated $40 000 to buy a chiller for the same venue. The Pine Cove management team, led by General Manager Allan Cramm, is strong as a result of the core of the group having been together since the mine was first developed. They were around from the time when there was no hole in the ground, to the development stage, to the mature stage and finally into the growth stage. We are veterans by now and it means that if we find another deposit on the peninsula, we have the experience to take it from the early stages into production. We ve done it before, and we can do it again.
ANACONDA MINING 150 York Street Suite 410 Toronto, ON M5H 3S5 Telephone: 416-304-6622 www.anacondamining.com 210-1310 Hollis Street Halifax NS, B3J 3P3 production@focusmediagroup.com.au